Several weeks ago, the GCF wrote to the Office for Statistics Regulation regarding the data being used by the Gambling Commission to back up the actions it is proposing for the regulated gambling market. As described, the Regulator engaged with the GC which resulted in an update to their webpage. The response and original letter are reproduced below:
Thank you for contacting the Office for Statistics Regulation. We are the regulatory arm of the UK Statistics Authority. Our remit concerns official statistics – statistics produced by government which must comply with the Code of Practice for Statistics.
Although the Gambling Commission and Department of Culture, Media, and Sport (DCMS) are producers of official statistics, the data related to your concerns were produced for the purposes of an impact assessment and do not constitute official statistics. Our findings and judgement are therefore made on an informal and advisory basis.
Background to the data
The estimate of 3% of accounts that would be affected by proposed financial risk checks was first generated by the Department of Culture, Media and Sport (DCMS) and made public in the April 2023 White Paper: High Stakes Gambling Reform for the Digital Age. The estimate was generated from an industry data request, which covered an estimated 19% of all active remote gambling accounts, as stated in the Advice document.
The relevant data are published in a data table on the Gambling Commission’s website. The timeframe of data collection (May 2020-April 2021) was selected due to being the most recent twelve-month period.
While we welcome the data table being published to support transparency, we found that the data table could benefit from including some quality information to support understanding of the data. We are pleased that following our engagement with the Gambling Commission, it has updated its webpage to make it clear that these data are not official statistics and to explain the reason for the timeframe selected for the data request.
Assumptions underpinning the 3% estimate
DCMS considered three relevant factors in its decision to adjust the 3-5.2% range from the Gambling Commission data request to reach a final estimate of approximately 3% of accounts. Considering the three factors together, it concluded that the true impact was likely to be at the lower end of the range, and therefore that 3% was a reasonable estimate for the purpose of impact modelling. These factors were as follows.
1. It considered there was likely to be a significant overlap between the two groups (the two risk classifications ‘Binge Gambling’ and ‘Significant losses over time’), in the data request, but did not assume a specific proportion of overlap.
2. It considered that industry reporting of ‘net loss’ figures was unlikely to take account of customer winnings within the period or prior to it, which when accounted for would reduce the number of accounts which reach the threshold.
3. Finally, data from Patterns of Play was considered, which found that 3.1% of active online accounts had losses over £2,000 over an entire year. This suggests that the Gambling Commission’s finding that 3.2% of accounts lost this much in just 90 days may have been anomalously high.
DCMS and the Commission acknowledge that online gamblers may have multiple accounts. Our view is it is appropriate for the Commission and DCMS to report on the number of accounts as this measure can be drawn from the statistical evidence.
You requested OSR to comment on the estimated number of accounts likely to be subject to enhanced checks. We are not an auditor of the management information held by either DCMS or the Gambling Commission and therefore have no remit to access the data to confirm whether over 1 million accounts will be subjected to enhanced checks.
We are writing to raise concerns regarding figures being quoted by the Gambling Commission in relation to the number of individual potentially impacted by affordability checks. We believe that given that Government policy is being dictated by these figures, and therefore, it’s exceptionally important that they are presented with context and caveats clearly reported. We would welcome your views as the statistics regulator as to whether it is the case that certain figures are being represented clearly and is a way that does not underestimate potential consequences.
As you are undoubtedly aware, the Gambling Commission is currently consulting on measures outlined in the Government’s Gambling White Paper. The proposed policy changes are predicated on the premise that ‘only’ 3%’ of betting accounts would be subject to checks. The CEO of the Gambling Commission has made this claim on several occasions most recently in both the CMS Select Committee and in an open letter to Racing Post readers last week. This figure is being used both to assuage opposition to affordability checks, and as a means to promote the concept of ‘frictionless’ checks, despite the fact, based on evidence where affordability checks are already taking place, this is practically impossible.
In the Gambling Commission consultation papers on page 69 (link), a table suggests 600,000 accounts will be subject to checks through binge gambling and 1 million from ‘significant losses over time’. Although many accounts would meet both these criteria simultaneously, could you confirm firstly that you agree that it will be over 1 million accounts subjected to enhanced checks?
If that is so, then we would welcome further comment on the 3% claim and how the Gambling Commission, and also the Government who take their figures from the Commission, have arrived at such a figure. We believe this figure is being used to privilege a hypothesis that affordability checks will work, despite their unproven track record in combating addiction, and the underlying fact addiction cannot be characterised by losses. We believe the Gambling Commission using figures to bolster an idea they appear already committed to 1) seriously distracts from clinical methods that will tackle addicting, and 2) undermines trust in the democratic process of the consultation regarding affordability checks, currently being undertaken by the Gambling Commission.
It is our understanding that the 3% figure in question is based on research conducted by the Commission, looking at 5.86 million accounts operated by an unspecified number of operators between May 2020- April 2021. In the same period there were 32 million active online gambling accounts operated by UK licensed operators. The referenced data is sparse, as it just gives the resultant numbers e.g. for Total number of active customers that reached the following net expenditure during any rolling 24hr period. They give for Loss exceeding £1000 that there were 116,880 active customers. The maths then equates to 116,880/5,867,022 = 0.199 = 2%. There does seem to be a difference between the number of active accounts that the Commission give in their industry data, 32,000,000, and what they are using in this calculation where they consider the number in their sample to equate to 19% of the population, so giving a total number of active accounts as (5,867,022/19*100) 30,879,063. The Commission, we understand, have said that there is no reason that player activity found in these accounts, expected to be from the five biggest operators, should be the same for all operators and also state “each expenditure limit should be considered in isolation from the others”. However, arguably the biggest limitation goes unmentioned, which was that during this time period the country was in a constant state of varying Covid-19 lockdowns restrictions, which will have undoubtedly affected the patterns of online play.
We would therefore ask if you would consider it was appropriate for the GC to use this period to conduct this research, and had a period such as May 2019-April 2020 been used instead, would have given a more representative picture of gambling spend than a period of impacted by lockdowns, in addition what level of activity on an account should be taking place for it to be considered active for statistical purposes?
The research also does not appear to have considered the fact that many people have multiple accounts. On that basis, would it again be more appropriate to report the number of people impacted as a percentage rather than number of accounts? We would argue that using the latter only serves to reduce the percentage number but give little indication of the number of individuals who will be subject to checks.
Whilst in part anecdotal, in a recent Racing Post survey of 9000 active bettors, 16.6% have been asked for documentation as part of an affordability check. It is this variance that concerns us regarding the way the Gambling Commission are using statistics as they themselves have stated their concerns about the ‘misuse of statistics’.
We look forward to your response to our concerns on this matter.